November 2, 2023
On October 27, 2023, the province of Quebec made significant changes to its rules relating to publicity contests open to Quebec residents.
In this regard, it repealed the provisions of its provincial Act respecting lotteries, publicity contests, and amusement machines relating to publicity contests and repealed its former rules regarding publicity contests. The current legislation was amended by Bill 17 (Act to amend various provisions for the main purpose of reducing regulatory and administrative burden, L.Q. 2023, chapter 24, articles 78 to 94, 98 and 99).
The Explanatory Notes accompanying Bill 17 state that:
“… the bill abolishes all specific standards for publicity contests, including the standard imposing the payment of duties to the Régie des alcools, des courses et des jeux for the holding of such contests.”
As such, sponsors of contests open to Quebec residents no longer must formally file their contests with the Régie des alcools, des courses et des jeux (Régie) or pay duty (in the past, essentially a fee) to the Régie based on the value of contest prizes, file a winners report at the end of a contest or post security in Quebec, where which was formerly required in some cases.
Other requirements applying to publicity contests run in Quebec were also eliminated, including the necessity to include specific Quebec-related disclosure language in promotional contest rules and seek permission from the Régie for contest modifications after the launch of a contest.
Quebec’s previous legal requirements for promotional contests open to residents of Quebec meant that contest sponsors running contests in Canada needed to either exclude residents of Quebec (commonly with contest language that a contest was “open to Canadians, excluding Quebec”) or comply with a number of additional filing, duty (i.e., fee), disclosure and potentially bonding (i.e., security) requirements in Quebec.
In reality, these additional Quebec-specific Canadian contest requirements meant that many sponsors of Canadian contests excluded their promotions from Quebec.
The key impact of these recent Quebec legislative changes means that it will now be significantly easier (and cost effective) for contest sponsors to run Canada-wide contests including those marketed to Quebec residents.
For more information about Canadian contest laws, see: Contests, Contests and CASL, Contest FAQs, Contest Tips and Contests and Social Media.
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CANADIAN CONTEST LAW TIPS
The following are some key legal tips for operating a successful and legal contest in Canada:
Criminal Code
Avoid the illegal lottery offences of the Criminal Code (e.g., include a bona fide “no purchase necessary” entry option and skill element, such as a time-limited, multiple-step mathematical question for potential winners as a condition of awarding prizes).
Short Rules (Mini Rules)
Include short rules / mini-rules with all of the required Competition Act disclosure requirements for point-of-purchase materials (e.g., print and in-store marketing, social media and Internet sites, packaging and labeling, television and radio spots, etc.).
For more information, see: Canadian Contest Forms & Precedents.
Long Rules (Official Contest Rules)
Ensure that precise long rules (i.e., the official contest rules) are included that reflect the details of the contest, anticipate potential contingencies (e.g., technical problems) and set out the terms of the contest as clearly as possible – for example, eligibility requirements, how to enter, prize descriptions, number and value of prizes, draws and award of prizes, odds of winning and indemnifying and releasing the contest sponsor and any co-sponsors or prize sponsors.
Contests are contracts, and so they should be as accurate, clear and precise as possible in the event issues arise.
For more information, see: Canadian Contest Forms & Precedents.
Winner Release Forms
Consider using winner release forms for contest winners.
While not required by law in Canada, winner release forms are almost always used by contest sponsors to have winners confirm that they have complied with all contest rules and release the sponsor from legal liability. Signing and returning winner releases is also commonly included in contest rules as a condition of awarding a prize.
Winner release forms are particularly important for contests in which there may be higher risk (e.g., where the contest involves high value prizes or a trip prize). For trip contests, sponsors are generally advised to use winner releases for both winners and any travel companions (and guardian releases for any minor companions).
For more information, see: Canadian Contest Forms & Precedents.
False or Misleading Advertising
Ensure that advertising and marketing materials are not false or misleading (i.e., comply with the general civil and criminal misleading advertising sections of the Competition Act, under sections 74.01 and 52).
In this regard, contests in Canada must comply not only with stand-alone contest provisions of the Competition Act (under section 74.06) but also with the general misleading advertising sections of the Competition Act.
It is particularly important to ensure that the marketing materials also matches the contest rules and that all material aspects of the contest (e.g., number and type of prizes, prize values, how to enter and win and any conditions/limitations) are accurately described in the short rules, long rules and marketing materials.
Canadian Federal Anti-spam Law (CASL)
Comply with Canada’s federal anti-spam legislation (CASL).
CASL is often relevant when running contests in Canada, including if electronic distribution lists will be used to market the contest, the contest will include the collection of e-mails for marketing unrelated to administration of the contest, if entrants’ e-mail addresses will be shared with third parties (e.g., related entities or affiliate marketers) or entrants are either required or incentivized (e.g., through additional entries) to “share” the contest with friends or family.
Given the potentially severe penalties for violating CASL, which include AMPs of up to CDN $10 million, it is very important for contest sponsors to ensure that they comply with CASL for any electronic marketing related to promotional contests open to Canadians.
For more information about contests and CASL, see: Contests and CASL and CASL Compliance Errors.
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CASL Compliance Checklists and Precedents: For information about the CASL compliance checklists and precedents we offer, see: CASL Compliance Checklists and Precedents.
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INTELLECTUAL PROPERTY CONSENTS
Consider whether consents are needed (and if necessary obtained) to reproduce third-party intellectual property – for example, trade-marks, logos, etc. – or to transfer ownership in contest materials – for example, where contestants create original material as part of the contest.
Contest rules in Canada commonly include rights (e.g., a licence) for the sponsor to use information and content contributed by entrants and if entrants will be contributing original content (e.g., photographs, essays, etc.) it is also a good practice for sponsors to include guidelines relating to their rights to use (or reject) any entrant contributed content.
For more information, see: Guidelines For Consumer Generated Content Contests.
U.S. LEGAL ADVICE IF OPEN IN THE U.S.
Seek U.S. legal advice if the contest will be open to U.S. residents or limit the contest to only Canadian residents.
SOCIAL MEDIA PLATFORM RULES
Comply with social media sites’ terms of use if using social media to promote or host a contest (e.g., Facebook’s Promotions Rules).
Also ensure that appropriate disclosures are made in all social media marketing (i.e., include short rules).
For more information, see: Contests and Social Media.
OTHER COMPETITION LAW
AND ADVERTISING LAWS
Consider whether other competition or advertising law rules may apply to a contest. For example, in addition to the stand-alone contest provision (section 74.06), the Competition Act also contains provisions governing deceptive prize notices, general misleading advertising (sections 52 and 74.01) and telemarketing that involves prizes.
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SERVICES AND CONTACT
We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
Our experience includes advising clients in Toronto, across Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.
To contact us about a potential legal matter, see: contact
For more information about our firm, visit our website: Competitionlawyer.ca
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
